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EMERGING MARKETS-Brazil's real, Peru's sol outperform Latam FX; Stocks at 8-mth high

    * Brazil govt improves 2020 GDP forecasts, promises reforms
    * Peru names Francisco Sagasti as interim president
    * MSCI Latam stocks index at over 8-mth high

 (Adds details, updates prices)
    By Shriya Ramakrishnan and Ambar Warrick
    Nov 17 (Reuters) - Brazil's real gained on Tuesday amid
improving prospects for Latin America's largest economy, while
the Peruvian sol bounced back from record lows after the country
named a new interim president.
    The MSCI's index of regional stocks rose
more than 2% to an eight-month high, with Mexican stocks
surging nearly 4% in catch-up trade.
    The prospect of accommodative monetary policy - resulting
from ultra-low lending rates - has helped emerging market
equities recover from pandemic-driven lows. 
    The real jumped 1.7% to the dollar after the
economy ministry raised its 2020 economic growth forecast to a
contraction of 4.5% from an earlier estimate of 4.7%, citing
upward revisions to third quarter activity.
    The government also said it will accelerate much-touted
reforms to public finances and privatization to restore economic
credibility in the country.
    The real has lost around 30% of its value against the dollar
this year, making it one of the worst-performing currencies in
the emerging market space, due to record-low interest rates and
growing concern over Brazil's fiscal health.
    "Rebounding capital flows to Latam would be a particular
boon to Brazil asset markets," Ilya Gofshteyn, senior EM Macro
strategist at Standard Chartered wrote in a note.
    "There is evidence that this process is already under way,
and the clearing of political hurdles in November (municipal
elections) and February 2021 (congressional leadership contests)
would open the door to further recovery."
    Peru's sol jumped 1.7%, and was set for its best day
in more than seven months after centrist legislator Francisco
Sagasti was elected by Congress as the country's interim
president.
    Sagasti will be Peru's third president in a week, after the
departures of Manuel Merino and Martin Vizcarra, and now faces
the challenge of bringing stability to a nation already hard hit
by COVID-19 and heading for its worst economic contraction in a
century. 
    "It's hard to say how stable the Peruvian political
situation will be as recent stress has been largely driven by
street protests, which are notoriously hard to predict," said
Gustavo Rangel, chief economist, LATAM, at ING.
    "Initial signs appear positive, for a calmer transition, but
I'd say it is still too soon to bet on a smooth transition."
    Other Latin American currencies marked small moves as a
continued spike in global coronavirus cases and doubts over a
vaccine dented sentiment.
    
    Key Latin American stock indexes and currencies:
    
                              Latest     Daily % change
 MSCI Emerging Markets         1202.20             -0.07
                                        
 MSCI LatAm                    2184.01               2.4
                                        
 Brazil Bovespa              107090.37              0.62
                                        
 Mexico IPC                   41996.55              2.95
                                        
 Chile IPSA                    4054.93              0.19
                                        
 Argentina MerVal             51991.68             1.775
                                        
 Colombia COLCAP               1226.27              1.36 Currencies             Latest     Daily % change
 Brazil real                    5.3481              1.69
                                        
 Mexico peso                   20.3227             -0.38
                                        
 Chile peso                      763.2              0.30
                                        
 Colombia peso                  3642.5             -0.19
 Peru sol                       3.6017              1.69
                                        
 Argentina peso                80.0300             -0.07
 (interbank)                            
                                        
 
    

 (Reporting by Shriya Ramakrishnan in Bengaluru; Editing by
Susan Fenton and Tom Brown)
  
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